International Marketing

16th edition

Chapter 3

History and Geography:

The Foundations of Culture

Philip R. Cateora, Mary C. Gilly, and John L. Graham

 Introduction 3

• To understand a society’s actions and its points

of view, you need to appreciate:
– The influence of historical events
– The geographical uniqueness to which a culture
has had to adapt
• Culture can be defined as society's accepted basis
for responding to external and internal events
• To interpret a culture’s behavior and attitudes, a
marketer must have some idea of a country’s
history and geography

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 Overview 3

• Historical perspective in global business

• Geography and global markets
– Climate and topography, geography, nature, and
economic growth, social responsibility and
environmental management, and resources
• Dynamics of global population trends
– Controlling population growth, rural/urban
migration, population decline and aging, and
worker shortage and immigration
• World trade routes
• Communication links
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 History Perspective 3

in Global Business
• History helps define a nation’s mission
– How it perceives its neighbors
– How it perceives itself
– Its place in the world
• Insights into history are important for
understanding current attitudes
• It is necessary to study culture as it is now as
well as to understand culture as it was
– A country’s history

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 International Marketing
16th edition

1. What are the various underpinning

of the historical perspective of global
business?

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
 History and 3
Contemporary Behavior
• Japanese history
– Seven centuries under the shogun feudal system
– The isolation before the coming of Admiral Perry in 1853
– Threat of domination by colonial powers
– Rise of new social classes
– Western influences
– Humiliation of World War II
– Involvement in the international community
• Historically, loyalty and service, a sense of responsibility, and
respect for discipline, training, and artistry were stressed to
maintain stability and order
• A historical perspective gives the foreigner a basis on which to
begin developing cultural sensitivity and a better
understanding of contemporary Japanese behavior

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 3
Case in Point: Japan
• Why do the Japanese have such strong
loyalty toward their companies?
• Why is a distribution system so difficult
for an outsider to develop?
• Why are decisions made by consensus?
• Why are they loyal to family, to country,
to company, and to social group?
 History is Subjective 3

• Historical events always are viewed from one’s

own biases and SRC
• A crucial element in understanding any nation’s
business and political culture is the subjective
perception of its history
– Relationship between U.S. and Mexico
• Monroe Doctrine

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 Territorial Expansion 3
of United States from 1783
Exhibit 3.1

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 U.S. Intervention 3
in Latin America Since 1945
Exhibit 3.2

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 Geography and Global 3
Markets
• Geography – an element of the uncontrollable
environment that confronts every marketer
– Affects a society’s culture and economy
– Physical makeup limits a nation’s ability to supply
its people’s needs

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 International Marketing
16th edition

2. What are the various components

of the geographical aspects of global
business?

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
 Climate and Topography 3

• Altitude, humidity, and temperature extremes

– South America
– British resistance of the English Channel
– Trade through the Alps

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Climate and Topography
Knowledge about geography, the
climate and physical terrain when
appraising a market

Influences marketing from product

adaptation to the development of
marketing systems

Climatic features affect uses and

functions of products and equipment

3-14
Climate and Topography
Products may require special cooling or
lubrication to function adequately in
tropical zones

Climate differences in Europe caused

Bosch-Siemens to alter its washing
machines

Geographic terrain such as mountain

ranges in a country can influence
transportation of products.
3-15
 Geography, Nature 3

and Economic Growth

• As countries prosper, natural barriers are
overcome
• Environmental issues
– Disruption of ecosystems
– Relocation of people
– Inadequate hazardous waste management
– Industrial pollution

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 Social Responsibility 3
and Environmental Management
• Environmental protection is not an optional extra
• Pollution is on the verge of getting completely out of
control
• China has 16 of the world’s 20 most polluted cities
• Critical issue: the disposal of hazardous waste
• Sustainable development
• The World’s 10 Most Polluted Places
• America’s Most Polluted Cities

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 A Comparison of Green-House Gas
3
Emission Rates and Pledges for
Reductions
Exhibit 3.3

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 Resources (1 of 2) 3

• The availability of minerals and the ability to

generate energy are the foundations of modern
technology
• The principal supplements to human energy
– Animals
– Wood
– Fossil fuel
– Nuclear power
– Ocean tides
– Geothermal power
– The sun
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 Resources (2 of 2) 3

• United States in perspective

– 1942 – nearly self-sufficient
– 1950 – major importer
– 1973-2000 – increased dependency from 36% to
66%
– Mid-2000’s – predicted to be importing more
than 70% of needs
• The location, quality, and availability of
resources will affect the pattern of world
economic development and trade well into the
21st century
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 World Energy Consumption 3

Exhibit 3.4

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 Dynamics of Global 3
Population Trends
• Global population trends determine today’s demand
for goods
– Rural/urban population shifts
– Rates of growth
– Age levels
– Population control
• Changes in population will profoundly affect future
demand
• The most important deterrent to population control
is cultural attitudes about the importance of large
families
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 World Population by Region – 2005-2050
3
Life Expectancy at Birth – 2005-2010
(millions)

Exhibit 3.5

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 World Population by Region – 2005-2050
3
Life Expectancy at Birth – 2005-2010
(millions)

Exhibit 3.5

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 International Marketing
16th edition

3. What are the dynamics involved in

global population trends?

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
 Controlling 3

Population Growth
• Procreation is one of the most culturally
sensitive uncontrollable factors
• Perhaps the most important deterrent to
population control is cultural attitudes about the
importance of large families
• Family planning and all that it entails is by far
the most universal means governments use to
control birthrates, but some economists believe
that a decline in the fertility rate is a function of
economic prosperity and will come only with
economic development
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 3
Population Control Issues
• Adequate Incomes
• High literacy levels
• Education for women
• Health care
• Family planning
• Cultural attitudes
• Political reasons
 Rural/Urban Migration 3

• Result of a desire for greater access to:

– Sources of education
– Health care
– Improved job opportunities

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 3
Population Decline and Aging

• Population growth in many countries has

dropped below the rate necessary to maintain
present levels
• A nation needs a fertility rate of about 2.1
children per woman
• Not one major country has sufficient internal
population growth to maintain itself

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 Age Density for World 3

and Selected Countries

Exhibit 3.6

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 Worker Shortage 3
and Immigration
• The free flow of immigration will help to
ameliorate the dual problems of explosive
population expansion in less-developed
countries and worker shortage in industrialized
regions
• Europe will need 1.4 billion immigrants over the
next 50 years
• Japan and the U.S. will need 600 million
immigrants between now and 2050

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 World Trade Routes 3

• Progression of trade routes

– Overland
– Sea routes
– Air routes
– The Internet
• Trade routes bind world together, minimizing:
– Distance
– Natural barriers
– Lack of resources
– Fundamental differences between and economies
• Trade routes represent attempts to overcome influence
of geography causing economic and social imbalances

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 International Marketing
16th edition

4. What are the various

communication links?

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
 Communication Links 3

Telegraph Telephone

Television Satellites

Computer Internet

McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc. All rights reserved.

 Summary (1 of 2) 3

• A prospective international marketer should be

reasonably familiar with the world, its climate,
and topographic differences
• Geographic hurdles must be recognized as
having a direct effect on marketing and the
related activities of communications and
distribution

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 Summary (2 of 2) 3

• Without a historical understanding of a culture,

the attitudes within the marketplace may not be
fully understood
• The study of history and geography is needed to
provide the marketer with an understanding of
why a country has developed as it has rather
than as a guide for adapting marketing plans

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